The December Midwest Economy Index climbed to 0.43 from a revised 0.17 in November, first reported 0.22, the Federal Reserve Bank of Chicago said Wednesday.

The relative MEI soared to positive 0.02 from a revised negative 0.20 in November, first reported negative 0.25.

Manufacturing added 0.39 to the index, after contributing 0.30 to the index in November, while adding 0.36 to the relative MEI, after a 0.27 contribution in November.

Construction and mining subtracted 0.02 in the month, after a 0.06 subtraction in November, while taking 0.07 from relative MEI index after a 0.11 subtraction in November.

The service sector MEI added 0.05 after a neutral level the prior month, while subtracting 0.27 from relative MEI after a 0.29 subtraction in November.

Consumer spending added 0.01 to MEI, after a 0.07 subtraction in November, while subtracting 0.01 from relative MEI after a 0.07 subtraction the prior month.

By state, Wisconsin contributed 0.17 in December, Illinois added 0.15, Michigan contributed 0.09, Iowa added 0.04, and Indiana subtracted 0.01.

The index is a weighted average of 129 state and regional indicators encompassing the five states in the Seventh Federal Reserve District (Illinois, Indiana, Iowa, Michigan, and Wisconsin). The index measures growth in nonfarm business activity.

A zero value for the MEI indicates that the Midwest economy is expanding at its historical trend rate of growth; negative values are associated with below-trend growth while positive values indicate above-trend growth. A zero value for the relative MEI indicates that the Midwest economy is growing at a rate historically consistent with the growth of the national economy; positive values indicate above-average relative growth; and negative values indicate below-average relative growth.

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.